General Motors' Big Bet On U.S. Tech Talent

In an IT overhaul, GM plans to create new U.S. software development centers. Manufacturers Ford and GE recently made the same move.

U.S. tech talent shortage? General Motors is making a very big bet that it can hire a steady stream of IT pros in the United States, including a lot of new college grads, as part of a new information technology strategy.

GM is planning an IT overhaul under CIO Randy Mott that includes creating three software development centers in the U.S. and potentially hiring hundreds of developers, project managers, and other IT professionals as it reverses its decades-old reliance on IT outsourcers. It will also consolidate its data centers in two main facilities in Michigan.

Mott thinks having the developers in the U.S. will make it easier for them to collaborate, believing that projects move faster and teams work better if they're physically located in the same place. Mott also wants IT pros who understand GM's automotive business. GM will add IT pros internationally, but they'll be in roles of planning and requirement gathering.

GM won't say how many IT people it plans to hire. But it had hired 91 new IT people as of late June, and "that's a slow ramp compared with where we will be," Mott says.

One of GM's three development centers will be in the Detroit area, where GM has its biggest IT presence already. The other two locations will be picked based on access to talent. "Our approach is to have some breadth so we can reach a lot of the [talent] market and reach a lot of the universities," Mott says. "We think of [potential sites] in terms of the radius of what they can reach. There are plenty of cities on the list."

GM's not alone in seeking among big manufacturers adding U.S.-based IT talent.

Ford recently created its own new Silicon Valley development center, which opened in June. The center has only a handful of people at this point, and Ford also has R&D centers worldwide. But Ford decided it needed a presence in the epicenter of software development, since people's car buying increasingly is influenced by the software inside, like Ford's Sync platform.

Chairman Bill Ford cited three main reasons for opening the Silicon Valley center. One, it provides a laboratory to try out new apps. Two, it gives Ford a better feel for what's happening in the Valley. And three, it will help the company tap the informal networking for which the Valley's famous. "It gives all the really smart entrepreneurs out there a place to go to interconnect with Ford," Bill Ford said at a recent event in Detroit.

General Electric likewise opened a Silicon Valley software center this year. GE already has a sizeable software group, GE Intelligent Platforms, based in Charlottesville, Va., as well as developers across its many divisions. But those people are focused on very specific industrial applications of software. Bill Ruh, the center's director (and a former Cisco executive), says the GE people in Silicon Valley will look at emerging trends in social media, analytics, and databases and explore ways to apply them to an industrial setting.

GE says its could hire as many as 400 software pros at the California center over the coming years. GM's plans likely include hundreds of new hires, but other people will be losing their jobs at IT outsourcing vendors as that work is moved into GM. Ford hasn't said how many it plans to hire.

It's not an avalanche of new jobs, but each of these companies could have created some or all of these jobs abroad, something many IT pros have come to expect. InformationWeek's recent Innovation Mandate survey finds that 63% of tech pros consider the U.S. a "strong player" in technology that's "losing its lead on a global scale." Only 32% consider it a power that's "positioned to grow its influence." The globalization of IT shows no sign of slacking, but U.S. IT pros have shown they can compete in that market. In these three examples, major multinational companies saw U.S. software talent as the right choice for innovation on a global scale.

At this year's InformationWeek 500 Conference, C-level execs will gather to discuss how they're rewriting the old IT rulebook and accelerating business execution. At the St. Regis Monarch Beach, Dana Point, Calif., Sept. 9-11.

Wooo-hooo any possible hiring spike in todayG«÷s job market is always awesome! It is a very promising field to graduate out of college and pursue a career in IT; it has continued to grow and will continue to grow. I think in return this will also create remote jobs for IT people as well as the local positions they hire for. The talent in this field is so extensive and broad it is going to be hard for Ford to locate a central mass of IT people all who poses the exact skillset they are looking for. Good to see they are bringing jobs back home where they are needed.

How is this going to create remote jobs? For an organization like Ford, GM or GE - I don't see them wanting to allow people to work remotely - it's all about social/team building.

And with regards to creating jobs - I think Chris makes a very valid point that unless these are new jobs as opposed to positions being moved from an outsourcing firm back into the organization that the number of new jobs actually created will be close to zero.

It's nice to think that this will result in lowering the overall unemployment numbers out there, but unless these are new initiatives with brand new positions, this could turn into a zero sum game.

Only time will tell if GM is doing as the article implies, hiring American developers. I though must confess that I am doubtful GM will seek to hire US citizens for development. To the contrary, I anticipate much of the development process will be performed by foreign nationals and/or physical development performed elsewhere with oversight performed in this country.

GM's insourcing plans are well timed -- considering several years of North American companies' outsourcing of IT jobs combined with a 4-year bad economy -- both of which followed post-Y2K job reductions in IT and the dot-com crash. GM and other employers can now shop for top IT talent from the best schools, plus semi-experienced IT pros whose incomes have been reduced due to the factors I stated. The outsourcing of mainframe, legacy programming work has thrown lots of competent, highly knowledgeable IT pros out into the snow and left them there. Innumerable, mission-critical applications written in COBOL will continue to be maintained and enhanced in India. If the work done by supposedly brilliant foreigners who deliver superior results (clean, understandable, efficient, working code) is on time and cost-effective, then that's the new standard for U.S. workers to match. However, swapping out mediocre productivity by U.S. workers for equal or inferior work is unacceptable.

I agree with you Jim , it is not just matching competency but creating more value in whatever we do....somehow Innovation is more promoted these days ( a simple route to cut copy paste ) than invention

Randy Mott's visionary direction for GM IT fits emerging dynamics. This labor substitution invokes a change for the IT supply chain accommodating strategy implementation. Randy noticed that GM's employee pyramid presented huge risks: key decisions, processes and responsibilities outside GM's direct control. GM can rebuild its pyramid while creating new infrastructure. This is revolutionary. It boldly states the US can supply the labor. We often hear that there are not qualified people. GM understands. GM is taking direct responsibility for finding, selecting and readying their new IT pyramid. The real trick will be evolving it over time so in supporting business needs. Best practices from all over the world (including from the large outsourcers themselves) will be central to execution. Mathisis Tech was created with just this view of the US business climate and approach in mind, so GM has some thought leaders and practitioners it can reach out to.